Twitter Valued at US$14.2 Billion

Twitter has just announced that it will soon begin trading its shares at US$26 per share on the New York Stock Exchange (NYSE). The company will be releasing 70 million shares (expected to raise about US$1.8 billion), and have granted underwriters a 30-day option to buy an additional 10.5 million shares -- should there be enough demand.

The public listing values Twitter at $14.1 billion, and will be the second biggest Internet company IPO, behind Facebook's US$16 billion offering in 2012. In third place is Google's 2004 IPO which raised US$1.67 billion.

At the initial filing, Twitter admitted that it wasn't profitable -- yet -- and had about US$316 million in revenue. According to its SEC filing earlier in the week, it also said that it will be using the money raised from the IPO for "general corporate purposes, including working capital, operating expenses, and capital expenditures."

The focus now turns to how Twitter stock will fare on Thursday. Some analysts said they expect shares to experience a small pop during the first day. Twelve-month price targets on the stock range from $29 to $54. Brian Wieser, an analyst at Pivotal Research Group who valued Twitter this week at $29 a share, said the stock appears to have strong institutional investor support and could easily close over $30 a share on its first day.

Despite the strong enthusiasm for the stock, Wieser warned that trading would be volatile due to a lack of understanding about how social media companies and their business models work.